RPT-Culture clash means Microhoo! easier to say than do
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SEATTLE, Feb 1 (Reuters) - Yahoo Inc's (YHOO.O) purple T-shirt and jeans-clad employees could soon be shopping for dress-shirts and khaki pants.
If Microsoft Corp (MSFT.O) manages to buy the ailing Internet icon, it faces a clash between Yahoo's free-wheeling corporate culture and Microsoft's more button-down workplace, where even casual meetings often require PowerPoint slides.
That culture clash is just the beginning of the challenges ahead for Microsoft if its $45 billion offer is accepted.
First and foremost, Microsoft must convince Yahoo's best and brightest to bury years of Silicon Valley animosity toward its wealthier neighbor to the north and work together to fight a common enemy: Google Inc (GOOG.O).
Meanwhile, Microsoft's top brass will have a Noah's Ark of a Web company -- with two of everything -- that needs to be molded into one cohesive brand.
"It's definitely going to be a long process," said Toan Tran, analyst at Morningstar, noting Yahoo's own restructuring adds another layer of complexity to what already would have been an arduous integration.
Microsoft Chief Executive Steve Ballmer launched his charm offensive on Friday, telling a conference call for analysts that Yahoo employees should be "very, very excited" about Microsoft's offer and that the two companies share a common vision on the Web and will be more competitive together.
The Redmond, Washington-based company tends to breed aggressive executives in the mode of Ballmer, who rarely shies away from a fight, while Yahoo advertises its "irreverence" to prospective employees on a job site, saying "We yodel."
Analysts worry about employees wary of Microsoft leading an exodus of Yahoo talent to Google and others because, unlike mergers of companies with fixed assets and valuable patents, Yahoo's prime asset may be its people and their Web expertise.
"If you are a brainiac engineer within search or any other division within Yahoo, do you want to get usurped into a Microsoft culture where maybe they don't care as much about the Internet?" Bear Stearns analyst Bob Peck said on a call with clients. "Culture clash will be one of the big things."
The two companies tend to view the world in fundamentally different ways. Sunnyvale, California-based Yahoo has always been a Web company, while Microsoft's roots are in selling software that runs on a computer's hard drive.
Microsoft Office and Windows are its core products, providing the bulk of the company's profits. By contrast, its online services division has not turned a profit in two years.
TWO OF EVERYTHING
The biggest challenge of all may be how to integrate two companies with significant overlap in Web properties. Continued...
